Monday, July 22, 2024

New Apollo CEO predicts end of investor ‘break’ after Epstein report

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Marc Rowan, the incoming general manager of Apollo Global Management, projected confidence that investors would quickly return to committing capital to the company after a report from outside lawyers on his predecessor’s ties to Jeffrey Epstein.

Co-founder of Apollo who played a leading role in the development of the credit and insurance business of the company, Mr. Rowan announced a “semi-sabbatical” in July.

But he came back to take the lead of Leon Black, who announced last week that he would relinquish his post but remain president.

“Obviously, looking back, taking a sabbatical in the middle of a pandemic is a very bad idea,” Rowan told analysts on Wednesday. “I haven’t been anywhere and I haven’t done anything.”

Mr Black’s departure as chief executive – which will take effect by the end of July – follows disclosure that he paid Epstein $ 158 million between 2012 and 2017 for tax advice and other services.

A report by international law firm Dechert, which Apollo had hired to probe the relationship between the two men, found no evidence that Mr. Black was involved in Epstein’s criminal activities, and there was no suggestion that Epstein had done business with Apollo.

Apollo warned in October that its capital raising activities would slow down as some investors awaited the findings of the investigation. The company reported $ 13 billion in capital inflows in the last three months of 2020, little change from the previous quarter.

“In the fourth quarter a number of people took a break, just to wait and see the results. [of the review]Mr. Rowan said. “I believe in the first trimester we’ll see some of that hiatus just come to pass, and then we’ll get stronger every day.”

Mr Rowan said he has spoken to many investors since the report was released last week. “They congratulated us on the steps we have taken regarding governance changes and succession planning,” he added.

These reforms include the addition of four independent directors and the elimination of a two-class share structure to allow outside investors to have more say in the management of the company.

The moves follow similar actions by peers including Blackstone, KKR and Carlyle Group, and aim to expand ownership of the company’s shares and pave the way for inclusion in a wider range of financial indices.

“We are all moving from the small private partnerships we started life with to important components of a more global financial system,” Rowan said.


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